Bard College, Economists, Debt, and Deficit
WARNING: economist fail ahead.
Parents, save your money if you’re considering Bard College for your high school student, at least based on the quality of this piece from Dimitri Papadimitriou (check that man’s green card!). Why so hard on the Bard? Because Papadimitriou is president of the Levy Economics Institute at Bard and is an executive vice president there.
(And when you hear those impressive sounding credentials, ponder that Barack Obama is President of the United States.)
Where is it that Papadimitriou fails in his article, a plea for yet more government spending and debt? In a word, everywhere. That is, in his disingenuousness, in his diagnosis, and in his prescription:
The deficit has arguably gained the distinction of being the single most widely misunderstood public policy issue in America. Just 6% (6!) of respondents in a recent poll correctly stated that it had been shrinking, which has in fact been the case for several years, while 10 times more, 62%, wrongly believed that it’s been getting bigger.
Despite prevailing notions in the capital and throughout the nation, those of us at the Levy Economics Institute — along with many other analysts and economists — have concluded that the deficit should be increased.
Why add to the deficit right now? Jobs. Our economic models clearly show that without increased government outlays we’ll be unable to generate enough GDP growth to seriously attack unemployment. If we tried to balance the budget through tax hikes, our still-recovering economy would be hurt. That leaves a temporarily bigger deficit as an important option.
Papadimitriou fails to acknowledge that things that can’t continue forever—like the federal debt and massive yearly deficits—won’t. At this point, it should be clear to most people that the government can’t fulfill all the promises it’s made, nor will it be able to repay its debt without the magic of inflating it away.
Papadimitriou also fails to point out that under President Obama’s leadership the debt has increased every year, and his Administration’s deficits made George W. Bush look like a piker. And while government can create jobs, it can’t create value, which is what we the people are really after. Remember “the stimulus” and what it did—based on results and not theory—to “fix” unemployment? In short, central planning fails.
Yes, the government managed construction of a courthouse might cost $145 million while private industry doing the same brings the identical building in at $85 million, so it’s possible to make the case the government version of the project created more jobs, but that doesn’t make the government version more valuable, it just makes it more expensive. Yet to a man like Papadimitriou, the government version magically “added” another $60 million to our GDP.
“Economics,” as practiced by those like Brad DeLong, Paul Krugman, and Dimitri Papadimitriou is little more than politics with a fig leaf and more plainly, intergenerational theft.